Er3+ doped Y2O3 nano-crystals with different size are prepared using combustion method. Size effect on luminescence properties of Er3+ doped Y2O3 nano crystals are investigated. No shift of the absorption peak in the photo-acoustic spectra is observed with the decrease of the Y2O3particle size, indicating that the size induced energy shifts of the rare-earth levels are negligible. However, the emission spectra under 488nm excitation indicate that the ratio of the intensity of 4S3/2→4I15/2 transition to that of 2H11/2→4I15/2 decreases with the decrease of the particle size. It is believed that the rate of hypersensitive transition of 2H11/2→4I15/2 increases with the decrease of the particle size more quickly than that of transition of 4S3/2→4I15/2. The time dependence of the 554nm luminescence decay excited by 518nm reveals that the rate of up-converted energy transfer occurring between two Er3+ ions in 4S3/2 state increases with the decrease of the particle size.